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Saturday, June 12, 2010

Facebook Fans Spend More Money [STUDY]

A social media marketing company called Syncapse surveyed [PDF link] 4,000 people who have “Liked” the top 20 brands that have pages on Facebook and figured out exactly how valuable those “fans” are.

The study (“The Value of a Facebook Fan: An Empirical Review”) estimates that someone who has Liked a brand will spend an average of $71.84 more each year on that brand’s products or services than will someone who has not Liked it on Facebook, for a total average annualized value of $136.38.

This method is very different than the one employed by Vitrue in another fan value study a month ago. Vitrue’s method valued fans by figuring out how much it would cost to buy advertising on a website to reach the same people.

Product spending was only one of six fan benefits that Syncapse studied. The others were loyalty, propensity to recommend, brand affinity (“perception and recall”), media value (efficiency of Facebook vs. other ways to reach consumers) and acquisition cost.

In most cases, the average fan was more valuable to the brand than the average non-fan, though results varied widely on an individual basis. For example, some fans spent no money at all on a brand and never recommend it to friends.

Note that this was just demonstrated as a correlation, nothing more. Nabbing someone as a Facebook fan hasn’t been proven to increase spending in this study. The study just demonstrates that people who become fans of brands are more likely to spend and evangelize. If they liked the brand enough to “Like” it on Facebook, they might have done those things anyway.